Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

5. To ask the Tánaiste and Minister for Social Protection if she will increase funding to CSP schemes to take account of the increase in the minimum wage by 50 cent per hour from 1 January 2016. [1251/16]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

This question relates to the same issue, namely, the problem that has arisen because of the increase in the minimum wage without a tandem increase in the grant to CSP schemes. Will the Minister of State address this issue?

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for his question, which is on a matter we have already addressed. More than €1 billion was spent on a wide range of employment supports by the Department in 2015. This expenditure is being fully maintained in 2016. The CSP is one of these supports and provides financial support to community companies that supply revenue-generating services of a socially inclusive nature. Many of these companies are also funded from other sources and generate revenue from the public use of their facilities and services.

The CSP provides a contribution to the wage costs of the companies on the basis that the services are not fully self-financing or the cost of provision would be prohibitive on users. The Department does not set the wage rate, but requires the payment of wage rates consistent with local norms. As of December 2015, 398 companies employing 2,800 employees were directly supported by the CSP. The Department estimates that, at the end of last year, some 60% of those employees were being paid above the level of the minimum wage, which is in keeping with the social inclusion and social benefit objectives of the programme. The Department is committed to working with the remaining companies to achieve the objective of paying a reasonable wage. The Deputy should note that the CSP accounts for less than one third of the resources generated by these companies.

Contracts of up to three years' duration are provided for under the CSP. Arrangements whereby individual companies will be able to access additional financial resources to compensate for the welcome increase in the minimum wage - it is the second such increase under this Government - are being put in place. Submissions will be assessed on a case-by-case basis, with the annual funding commitment being adjusted accordingly where that is found to be warranted. An advance of 25% of the contract value for 2016 has been, or is in the course of being, paid to companies currently in the programme. This ensures that immediate cashflow requirements are supported. Overall, I am satisfied that the level of resources available to the CSP in 2016 at just over €45 million will be adequate to meet its ongoing funding needs.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I heard the Minister of State's preceding answer and am not asking him to go over all of that ground again, but he mentioned that there were 398 CSP schemes throughout the country. They have been told that, as of last December, the 2016 financial plan will need to incorporate any additional cost necessary to implement the minimum wage requirement. That is why we are discussing the issue. It means the extra amount required to pay employees the increased minimum wage will not be covered by the Department. That is basically what the Minister of State is saying.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

No, it is not.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The problem with this is that, because CSP schemes must find funds at short notice to meet the additional cost imposed by the increase in the minimum wage, it threatens the viability of many such programmes. Previously, the contribution to CSP schemes was reduced by €1 per hour when the minimum wage was cut, but the Minister of State and his Department suggest that the grant is only a contribution to payroll costs and is not intended to meet the costs itself.

The Minister of State also mentioned that CSP schemes should not constantly focus on the minimum wage. The proof in the pudding is that only 40% of their employees are on the minimum wage, which means that they already understand and have gone beyond this.

The Minister of State might not be aware that there are 53 payroll weeks in 2016, not 52. Therefore, there is an extra cost to be met in any case that would not normally be incurred.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

The Deputy came just short of trying to put words into my mouth. Had he been listening, he would have noted I told Deputy O'Dea that mechanisms are being put in place within the programme to provide additional resources to any company with a short-term financial difficulty. Deputy O'Dea actually welcomed that. We hope a mechanism to deal with this matter on a case-by-case basis will be put in place by the end of the month. The mechanisms will be notified to all companies to allow access, on the basis of a justifiable case, to additional funding. Deputy O'Dea read earlier a letter that was sent out regarding the funds.

The fact of the matter is that we want people involved in the CSP to be paid a good wage. However, our funding is approximately one third of the requirement. What I want to do, and what I have done, with groups since coming into my Department is work with them to try to ensure people with a career in this area have a reasonable wage. I repeat that mechanisms are being put in place within the programme to provide additional resources to any company with a short-term financial difficulty. We will have the mechanism in place and we will proceed on a case-by-case basis. There are no proposals to provide an across-the-board adjustment. Some are paid well over the minimum wage, which is quite welcome. In this regard, the CSP is being used as we wish it to be used.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I heard the earlier statement. I welcome the fact that there is a stopgap measure. That is all it should be in order to buy the Minister of State and the Department time until after the election. It does not address the fact that many of the companies are dangerously near financial breaking point. I realise the Minister of State knows about the equine project in Cherry Orchard. There was an audit for two years and a financial plan was put together on the basis of predictions about where funding would go in the future. Those concerned were not aware at that stage that they had to come up with another €11,000 in 2016 to pay the minimum wage. That means they will have to increase the cost or let people go. This defeats the purpose. The Minister of State made the point earlier that the services provided must be accessible to the users, which means keeping costs low. Especially with the likes of the equine centre, it means one cannot have extra hours for the horses, as it is already working at full tilt. One cannot squash more horses into the stables because there are none. Therefore, no more can be charged to raise funds. There is no other stream of income. While the centre might be able to apply for the stopgap measure announced, that defeats the purpose. The Minister of State already knows 40% of the workers in the CSP are on the minimum wage. We are not asking the Government to fund an increase for everyone on the CSP, just those on the minimum wage. We are asking it to plan for the future.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

On the Deputy's comment that this year is a 53-week social welfare week, we actually made provision-----

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

Last year.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

-----last year for that. The provision has already been made.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

There are 52 weeks this year.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

This is a 52-week social welfare year.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I am not talking about social welfare.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

No, but the Deputy made a comment earlier about 53 payroll weeks.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

It was in the Estimate.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

It was in the Estimate to make provision-----

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Regarding wages on the CSP, the companies have to pay wages for 53 weeks.

Michael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister of State has the floor.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

Provision was made in relation to that.

It is not good practice simply to allocate public funds without an underlying rationale. It is not a stopgap measure. We are putting a process in place.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It is a stopgap.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context | Oireachtas source

That process will be in place, I hope, by the end of the month. Certainly, the target is the end of the month. The objective of the programme is to have companies operating on a financially sustainable basis. Transitional financial supports will ensure this objective is pursued. We will work with the centres. With regard to the one the Deputy just mentioned, the Tánaiste herself was actually involved in setting it up. Not only am I aware of it; so, too, is she.

Recently, as Deputy Ó Snodaigh will recall, people in his constituency incorrectly claimed that funding was being cut and community centres would close. When people decided to protest the Deputy was among those who pointed out that these claims were factually incorrect. We are putting in place a process to resolve this issue. We will work through a structure and provide a rationale for ensuring the community services programme continues. The CSP works very well, not only in urban areas but nationwide, from Donegal to Cork and from Kerry to Galway.